Seocho 2012west 1831 (Law No. 11, 2012)

The loan interest of funds acquired by transferred assets shall not be deemed necessary expenses.

Considering the fact that the loan of funds acquired by transferred assets does not fall under any of the necessary expenses listed in the Income Tax Act, and that there is a problem of equity between the person who acquired transferred assets and the person who acquired transferred assets in money other than the loan if the person who acquired transferred assets deducts the loan interest from the necessary expenses, the disposition that does not recognize the loan

2012Gudan1970 Such revocation, etc. of disposition of imposing capital gains tax

Park AA

Head of Nowon Tax Office

November 9, 2012

December 7, 2012

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

The Defendant’s imposition of capital gains tax of KRW 000 imposed on the Plaintiff on March 14, 2012 shall be revoked.

1. Details of the disposition;

A. On August 19, 2004, the Plaintiff acquired at a voluntary auction from the Busan District Court (hereinafter “instant land”) a forest of 9,106 square meters (hereinafter “the instant land”) in the Busan District Court, but sold it to LH Corporation on December 20, 2010.

B. On March 14, 2012, the Defendant issued the instant disposition that determined and notified the Plaintiff of KRW 000 of the transfer income tax for the year 2010 by using the Plaintiff’s land compensation as the transfer value, and KRW 000 of the successful bid price at the time of acquisition as the acquisition price.

[Ground of Recognition] The non-contentious facts, Gap evidence 2, Eul evidence 1 to 3, and the whole purport of the pleading

2. Whether the disposition is lawful;

A. The plaintiff's assertion

As to the instant land, from January 12, 2006 to December 20, 2012, 2010, which is the date of the public notice of approval for the national rental housing construction project, the Plaintiff was unable to exercise the property right on the instant land, and the Plaintiff’s loan interest on the acquisition of the instant land during that period and KRW 000 shall be deducted from the calculation of transfer margin as necessary expenses. The first Defendant’s disposition of this case on a different premise is unlawful.

B. Determination

Article 97 (1) of the former Income Tax Act (amended by Act No. 11274 of Feb. 1, 2012) which was applied at the time of the transfer of this case limits the amount of transfer gains to "those prescribed by Ordinance of the Ministry of Strategy and Finance, such as "acquisition value", "capital expenditure, etc. prescribed by Presidential Decree", and "transfer expense, etc. prescribed by Presidential Decree", and Article 163 of the former Enforcement Decree of the Income Tax Act (amended by Presidential Decree No. 24104 of Sept. 14, 2012) provides that "acquisition value as "acquisition value" and "as prescribed by Presidential Decree, such as actual transaction price, "capital expenditure, etc.", and "transfer expense, etc. prescribed by Presidential Decree". In addition, if a person who acquired assets by the plaintiff does not fall under any of the necessary expenses listed in the above Act, and if the person who acquired the assets by the loan deducts the transferor from the necessary expenses, the plaintiff's assertion that there is a problem between the person who acquired transferred assets and the funds is legitimate reason for the plaintiff.

3. Conclusion

Thus, the plaintiff's claim is dismissed as it is without merit.